Bloomberg News

Canada May Consumer Price Index Report (Text)

June 22, 2012

The following is the text of Canada’s consumer price index report for May released by Statistics Canada.

Consumer prices rose 1.2% in the 12 months to May, following a 2.0% increase in April. This 0.8 percentage point difference was mostly attributable to declines for gasoline prices. Decreases in clothing prices as well as slower price gains for the purchase of passenger vehicles were also factors.

The energy index fell 1.6% in the 12 months to May, its first year-over-year decline since October 2009. Natural gas prices (-16.6%) continued to post declines. Gasoline prices decreased 2.3%, after 22 months of year-over-year increases. In contrast, electricity prices continued to rise.

Excluding energy, the Consumer Price Index (CPI) rose 1.7% in the 12 months to May after increasing 2.1% in April. For the second consecutive month, the CPI excluding energy increased at a faster rate than the All-items CPI.

12-month change in the major components

The 0.8 percentage point slowdown in the CPI in May was led by smaller price gains for transportation, as well as price declines for clothing and footwear.

Transportation costs rose 0.8% in the 12 months to May after increasing 3.2% in April. This slower rate of increase was largely the result of year-over-year price declines in gasoline and, to a lesser extent, smaller price increases for the purchase of passenger vehicles.

Prices for clothing and footwear were down 0.3% in the 12 months to May, following a 2.4% rise in April. This decrease was mostly the result of more women’s clothing being discounted in May 2012 compared with May 2011.

The main upward contributors to the 1.2% rise in the CPI were higher prices for food and shelter. Prices for food purchased from stores (+2.5%) and electricity (+5.4%) rose in the 12 months to May.

12-month change in the provinces

In the 12 months to May, consumer prices rose at a slower rate in all provinces compared with April. Newfoundland and Labrador (+2.5%) continued to post the largest increase, while Alberta (+0.4%) continued to record the lowest.

The decline in gasoline prices was a major factor in the easing of all provincial CPIs.

The CPI in British Columbia did not ease to the same extent as those of other provinces, rising 1.3% in the 12 months to May, following an increase of 1.6% in April. Gasoline prices in British Columbia decelerated the least of any province.

Seasonally adjusted monthly Consumer Price Index decreases

On a seasonally adjusted monthly basis, the CPI declined 0.2% in May, after increasing 0.2% in the previous two months.

The seasonally adjusted index for transportation, which includes gasoline and the purchase of passenger vehicles, fell 1.6%, following a 0.2% increase in April. The clothing and footwear index declined 0.8% in May, after increasing 1.1% the previous month.

Bank of Canada’s core index

The Bank of Canada’s core index (http://www.statcan.gc.ca/pub/62-001-x/2012005/technote- notetech2-eng.htm) rose 1.8% in the 12 months to May, following a 2.1% gain in April. Price gains for electricity, food purchased from restaurants and meat continued to be main contributors to the year-over-year increase in the core index.

On a monthly basis, the seasonally adjusted core index was unchanged in May, after rising 0.4% the previous month.

Note to readers

The special aggregate “Energy” includes: electricity; natural gas; fuel oil and other fuels; gasoline; and fuel, parts and supplies for recreational vehicles.

The Bank of Canada’s core index excludes eight of the Consumer Price Index’s most volatile components (fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuels; gasoline; inter-city transportation; and tobacco products and smokers’ supplies) as well as the effects of changes in indirect taxes on the remaining components.

To contact the reporter on this story: Ilan Kolet in Ottawa at ikolet@bloomberg.net

To contact the editor responsible for this story: Marco Babic at mbabic@bloomberg.net


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